Medvedev: Russia suffers damage of 25 billion euros

The gross domestic product (GDP) of Russia in the first quarter of this year fell by approximately two percent compared to the same period last year.

Industrial production in the first quarter of 2015 decreased by 0,4 percent year-on-year, said Russian Prime Minister Dmitry Medvedev, speaking today in the State Duma.

As reported by Tas, earlier the Ministry of Economic Development estimated the decline of the economy for the first two months of this year at 1,9 percent, with 2,3 percent in February and 1,4 percent in January.

The Prime Minister of Russia pointed out that the current crisis is not the worst possible, especially since the situation has already stabilized. As an example, he cited the situation with prices, unemployment, the state of the banking system and branches of industry, which could have been significantly more complex and worse.

Mevedev reminded that in 2009, Russia was faced with much more serious problems, that GDP fell by eight percent, and industrial production by more than 10 percent.

"But there must be no illusions, because we are not only facing short-term crises. If external pressures are intensified, oil prices remain at an extremely low level for a long time, we will have to develop a different economic reality," the prime minister pointed out.

Losses due to sanctions this year could rise to 75 billion euros, which is 4,8 percent of GDP, Medvedev warned. According to the assessment of foreign experts, last year Russia suffered damage of a total of 25 billion euros (1,5 percent of GDP), he added.

According to him, there is virtually no branch of the economy that is not affected by sanctions, starting with the financial sphere in the form of restrictions on access to foreign loans, and ending with the import of technologies.

Medvedev said that this situation required the government to act quickly.

The government increased the volume of budget loans to the regions from 150 to 310 billion rubles (2,7 to 5,6 billion euros). These funds are aimed at balancing regional budgets and making commercial loans cheaper. Also, according to the Prime Minister, local authorities should invest in strengthening financial sustainability.

The prime minister promised that financial assistance to small and medium-sized enterprises will be increased. It is also possible to provide other types of assistance to this structure, such as the full participation of small companies in state and local orders, in the procurement of monopolies and state enterprises, as well as in replacement programs. imports of domestic products.

He warned that import substitution will be implemented where there is justification for it, but he emphasized that it will not lead to empty shelves in stores as in Soviet times.

Medvedev assessed anti-Russian sanctions and the fall of the ruble as "favorable circumstances" for import substitution. At the same time, he reminded that this process requires both time and money. An import substitution program has been prepared in all branches - industry, energy, agriculture, which envisage the implementation of 2.500 projects.

Regarding some opinions that foreign trade chains are redundant in Russia, the Prime Minister pointed out that their presence on the Russian market gives consumers a choice and that from their point of view - the greater the diversity - the better.